JOHN SWINNEY is coming under increasing pressure to deliver a “significant” pay rise for the public sector in next week’s Holyrood budget.

Grahame Smith, the general secretary of the Scottish TUC, yesterday called on the SNP Finance Secretary to show some flexibility by lifting the public sector pay freeze.

He said: “We believe Swinney should look to remove the pay freeze and allow for the prospect of a pay increase. We’d hope that is something he will do.

“They do have a contractual requirement for incremental pay increases but frankly any announcement on pay has to go further than that.”

Swinney has indicated that he will look at modest increases in pay in next week’s financial statement.But Smith said: “If his modest is a fraction of percentage then I don’t think that’s acceptable given that there is a necessity to deal with pay increases that are contractually obliged.”

Smith called for schemes like the Small Business Bonus that provides reduced rates for retail shops to be scrapped.

Speaking to the TUC in Brighton, the Scottish union leader said local authorities should be allowed to raise council tax and scrap business rate exemptions to free up cash for wages.

Smith said: “He has political choices he can make – the small business bonuses is one of them.”